The 'new geography of jobs' isn't kind to the Rust Belt -- or is it?

Forbes.com runs a Q&A with the author of a new book, “The New Geography of Jobs,” and some of his answers won't be comforting to those of us in Northeast Ohio,The author is Enrico Bonetti, an economics professor and Fulbright Fellow at the University of California at Berkeley. Here's his response to a question about why he wrote the book: If you look at the economic map of America today, you do not see just one country. You see three increasingly different countries.On one hand there are cities like Seattle, San Francisco, Raleigh-Durham or Austin, with a strong innovation-based economy and workers who are among the most creative and best paid on the planet. At the other extreme are former manufacturing centers like Detroit, Flint or Cleveland, where jobs and salaries are plummeting. In the middle, there is the rest of America, apparently undecided on which direction to take.The difference between the three Americas was small in the 1980s and has been growing ever since.Prof. Bonetti's answer might sound a bit off to us these days, given that Ohio's unemployment rate of 7.4% is quite a bit better than the national average. But he says the numbers are a result of a couple good could years for manufacturing, and in particular, the car business.“In general, for the past 30 years, we have been losing an average of 370,000 jobs per year in manufacturing, and not just during recessions,” he says. “This trend reflects the adoption of new technologies that make production of physical goods increasingly automated. … American manufacturing companies produce today more goods than in 1980, but they only need a fraction of the workers. I do not think these trends are likely to change in any significant way.”

Education levels will determine which cities thrive in the future, Prof. Bonetti says.“Economic research shows that cities with many college-educated workers tend to develop an innovation-based economy; and this brings even more well-educated workers there, further reinforcing their edge,” he tells Forbes.com.“It is a tipping point dynamic,” Prof. Bonetti says. “By contrast, cities with few well-educated workers miss-out on the growth of high tech, and this further reduces their appeal. These self-reinforcing dynamics magnify the differences between winners and losers in an innovation-driven economy.”

Wait just a minute, professor

For a more positive take on the Rust Belt's future, check out this piece, from The Atlantic, about improvement in the manufacturing sector.The magazine notes that there indeed was a “great plunge” of U.S. factory jobs over the last three decades, from more than 19.4 million in 1979 to a little more than 11.5 million in 2010. Recently, though, “manufacturing has staged a small comeback,” adding 350,000 jobs between January 2010 and December 2011.“It's a modest increase, but at least it's a movement in the right direction,” The Atlantic says.From 2000 to 2010, the story notes, “manufacturing employment fell in the Midwest and South at roughly same the pace.” But since 2010, “the Midwestern factory employment has recovered faster than the rest of the nation's, growing by 5 percent compared to 2.2 percent in the South.”A big part of the reason for this: the Midwest has become more cost-competitive.

“Though states like Michigan and Illinois haven't gone to war against their unions, some factory wages have dropped,” The Atlantic says.“The major labor unions have also switched gears from trying to bid up pay and benefits to job preservation, as was vividly demonstrated by the most recent round of negotiations between the major car companies and the United Auto Workers. … In return, they got assurances that the companies would hire more workers, and bring more production back from abroad. Meanwhile, Midwestern states have become more adept at luring factories with generous tax breaks.”

Innovation goes to school

U.S. business schools are adding research centers, classes and even full-fledged majors in innovation to capitalize on the eagerness of companies — including Akron-based Goodyear Tire & Rubber Co. — to invest in the area, according to this Wall Street Journal story.“According to a May analysis by the Association to Advance Collegiate Schools of Business, an accrediting body, involving 733 member schools, 28% include the words ‘innovate,' ‘innovation' or ‘innovative' in their school mission statements,” The Journal notes. “Most use the terms to describe their own curricula.”Last fall, Dartmouth College's Tuck School of Business offered a new five-day course, “Leading Innovation: From Idea to Impact,” for $11,000. Clark Callahan, executive director of Tuck's executive education arm, tells The Journal that the 30-plus spots filled quickly with participants from such companies as Goodyear and Medtronic Inc.Many other schools are following a similar strategy, the newspaper notes. But The Journal says some observers think the schools “may be missing the mark, focusing too heavily on ‘ideation' and brainstorming while skimping on the practical aspects of turning ideas into concrete strategy and action.”For instance, Robert Sullivan, dean of the Rady School of Management at the University of California, San Diego, tells The Journal, “Innovation requires taking the great idea and doing something with it.”You also can follow me on Twitter for more news about business and Northeast Ohio.

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